TRANSFORMATIONS FAIL

10 REASONS WHY DIGITAL TRANSFORMATIONS FAIL

Partha Banerjee, Group IT Manager at Al Safeer Group offers us an expert view on why some digital transformation journeys tend to fail and how avoiding the listed mistakes would be vital to ensuring successful digital transformation

Digital transformation is the latest trend in the market. CIOs are stitching together cloud, APIs and micro services into platforms to augment business processes. Agile architectures, they believe, help streamline operations and better serve customers. More than 50% of the business and tech leaders claim that their organization is advancing digital transformation plans across the enterprise.

The harsh reality is that such transformations often feel like mirages: cool and inviting from afar, but less real as they progress along the path. Often the biggest misstep is the inability to account for the cultural change required to pull off enterprise-wide transformation.

Getting blindsided by COVID-19 isn’t doing organizations any favors on their transformation journeys, but even for those who keep most of their budgets intact, there are very specific impediments to driving wholesale enterprise change. Here are 10 stumbling blocks that are considered to be responsible for derailing digital transformations. 1. Culture shock: For many organizations, the culture change required for transformation can prove insurmountable. A large number of organizations say that their organizational structure is not aligned to support transformation. Technology is at everyone’s fingertips but realizing how to optimize its potential is complicated. That narrow mindset — lacking a common vision and failing to consider the entire ecosystem — is exactly where digital initiatives go wrong.

2. Lack of CEO sponsorship: Digital transformation efforts are coming up short on intended ROI, in part because digital transformation is as much a leadership issue as it is a strategy, technology, culture and talent issue. Transformation starts from the top — in theory, at least. But, according to a 2017 Wipro Digital survey, the lack of a clear transformation strategy was cited by 35 percent of executives as a key barrier to achieving its full digital potential, according to Rajan Kohli, global head of Wipro Digital, the CEO is often to blame.

3. The problem with siloes: Many technology leaders cited too many competing priorities as a transformation hurdle they are struggling to clear. It is critical to secure consensus among senior leaders and stakeholders regarding business goals and minimize conflicts in expectations. COVID-19 has highlighted these disconnects in the organizations. A product owner who can’t see inside the supply chain because they aren’t allowed access will find it difficult to serve customers. Moreover, a siloed organization isn’t going to respond nimbly in a crisis such as the coronavirus pandemic. It's about success in transcending or traversing the organizational siloes and the organization layers to transform all of the business processes to get the outcome you desire.

4. Trouble with ‘what and how’: Assuming they get over their resistance to change, most companies don’t exit the ‘wait-and-see’ mode until lackluster financials and pressure mounts from the board and rivals. Still, most leaders struggle to figure out what they need to change and how to go about it. This indecision can create inertia or, worse, wrong decisions. A major stumbling block for transfor-

mations involves the failure to understand the technology required and the talent necessary to operate it. Business unit leaders must liaise with their CIOs to get a handle on the knowledge gaps. The pace of digital change makes this a difficult but necessary ingredient for success.

5. Wait-and-see trap: Indecision over the “what and how” puts companies in binds, as they delay transformation. The single biggest predictor of success of transformation is the promptness of their start. Ironically, while COVID-19 has ground a lot of businesses to a standstill, it’s also accelerated transformative tech maneuvers in a matter of weeks instead of months. COVID-19 is driving us through barriers.

6. The shiny new toy syndrome: Neither the willingness to change nor the perfect alignment of tech and staff can save CIOs from falling into the technology-centricity trap, aka the shiny new toy syndrome. While technology is a critical driver of transformation, applying tools that don’t help satisfy customer demands or enable new digital business models adds little value. Another problem is that of picking favorites, such as cloud, predictive analytics, block-chain, artificial intelligence or internet of things (IoT).

Sometimes CIOs can fall in love with a single tool in their kit and obscure fundamental competitive and customer considerations. The clients we see that are doing well focus less on the new shiny toy or new tech component and more on looking for the right place to apply it.

7. Big Bang Theory: Organizations that find common grounds on a strategy and show a willingness to change tend to treat transformation with a Big Bang approach, rather than as a series of iterative shifts shaped to change the business process. Often, this results in too many expectations on too many outcomes. And if the culture isn’t aligned right, the strategy fails. Partha Banerjee Group IT Manager, Al Safeer Group

8. Slow & unpredictable ROI: In a survey carried out by Wipro Digital's survey only 4 percent of respondents said they realized barely half of their digital investments in less than a year, with the majority of respondents saying it has taken their company two to three years to see at least half of these investments come to fruition. The scale and pace of digital acceleration compounds the issues, making it hard to close the gap between incumbents and rivals. For instance, companies that are starting version 2 of a digital service may find themselves competing against disruptors that are on a higher version. Scale or network effects can make failure seem even bigger. software engineers trained in the latest programming languages and product managers who know what customers want in a virtual assistant. But demand far outstrips supply, and most enterprises find it hard to lure seasoned software developers, product managers and other tech professionals away from high paying and reputed establishments.

10. Lack of continuity: Usually, senior-level leaders don’t want to inherit a transformation, they want to start from scratch to leave their mark. Turnover among the rankand-file staff and other managers is as much to blame for the issue. With CIOs and their staff jumping ship (both voluntarily and involuntarily), enterprises suffer in executing their digital strategies.